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August 9, 2012

Obama Administration Gives More Green Lights for Green Projects

August 9, 2012
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Renewable energy in Nevada and other Western States is getting a boost from the Obama Administration, even as the coal, oil and natural gas industries are under assault. First, the U.S. Department of Agriculture announced a $105 million loan guarantee to   finance the development of a facility that would convert municipal solid waste into advanced biofuels in northern Nevada[i] and then President Obama announced plans to expedite the permits for seven solar and wind energy projects on federal lands in Arizona, California, Nevada, and Wyoming. Further, the Interior and Defense departments announced a partnership to develop renewable energy on military lands and waters covering 16 million acres in Southwestern states including Nevada and offshore that have the potential for solar, wind, and geothermal energy development. Senate Majority Leader Harry Reid called it a “landmark agreement” and pledged to move any necessary legislation to “expedite renewable energy development in Nevada and across the nation” and to cement the agreement between the two departments.

The USDA Loan Guarantee

As part of its Biorefinery Assistance Program (Section 9003 of the 2008 Farm Bill), the USDA provided a $105 million loan guarantee to Fulcrum Sierra BioFuels, LLC to develop an advanced biofuels plant using municipal solid waste. The USDA estimates that the biofuels plant located 20 miles east of Reno, Nevada, will create 430 jobs during construction and 53 permanent jobs. The plant is expected to convert 147,000 tons of processed municipal solid waste into over 10 million gallons of advanced biofuels each year using a two-part thermo-chemical process. USDA approved an 80 percent loan guarantee to finance the project, with a conditional commitment that Fulcrum Sierra BioFuels must meet before loan closing.

The Biorefinery Assistance Program is administered by Rural Development’s Business and Cooperative Service of the USDA. It is designed to financially assist with the commercial deployment of technologies to produce advanced biofuels; promote resource conservation, public health, and the environment; diversify markets for agricultural and forestry products and agriculture waste material; create jobs and enhance the economic development of the rural economy.

USDA funded 7 additional biorefineries that are using feed stocks like agriculture residue, woody biomass, municipal solid waste, and algae in various states including Florida, Michigan and New Mexico. USDA is also spending research money on the science necessary to develop biofuels from a range of different feed stocks; and the agency has incentivized farmers to grow advanced feed stocks from non-food, non-feed sources on about 60,000 acres of U.S. lands.

Expediting Permits for Renewable Projects on Federal Lands

President Barack Obama announced that seven renewable energy projects on public lands across four Western states (Wyoming, California, Arizona, and Nevada) would be expedited. The projects are expected to produce about 5,000 megawatts of power from wind and solar energy when those resources are available, i.e. the wind is blowing and the sun is shining. Three projects are expected to complete their federal permitting process as early as December and the others no later than October 2014.[ii]

The largest project is a 3,000-megawatt wind installation spread across 23,000 acres in Wyoming called the Chokecherry and Sierra Madre Wind Farm Project by the Power Company of Wyoming. To get an idea of its size, once built, this wind farm would be over 50 percent as large as the District of Columbia, which is 43,712 acres. The Interior Department expects to complete the federal permitting process for this wind farm, the largest proposed in North America, by October 2014.

The remaining 6 projects include: in Arizona, the Mohave Wind Energy project and the Quartzsite Solar Energy Reserve project; in Riverside, California, two photovoltaic solar projects — Desert Harvest Solar Energy (enXco) and the McCoy Solar Energy (NextEra) project; in Nevada: the Moapa Solar Energy Center, under development with the Moapa Band of Paiute Indians on reservation and Bureau of Land Management (BLM) lands, and the Silver State South (First Solar) solar generation plant.

The White House intends to announce additional expedited renewable projects in the coming weeks.

Partnership to Develop Renewable Energy on Military lands

The memorandum of understanding between Secretary of the Interior, Ken Salazar, and Secretary of Defense, Leon Panetta would open 16 million acres of land for renewable development that had been previously set aside for military testing and training.[iii] It includes a “pilot process” that the Department of Defense and BLM will undertake regarding solar development at military installations in Arizona, California, and other sites. It would also open up possible offshore wind development along the Atlantic Coast, in the Gulf of Mexico and off Hawaii.[iv]

According to Dorothy Robyn, Deputy Under Secretary of Defense for Installations and Environment, even though a Pentagon study showed that 96 percent of nine bases in California deserts near Nevada were unsuitable for solar development due to military, endangered species and other concerns, there was the potential at four California bases to produce about 7,000 megawatts of solar energy.[v]  That, of course, is 7,000 megawatts of solar capacity; generation from it needs the sun to be shining, so back-up power from reliable, non-intermittent sources is required when it is not.

Conclusion

The Obama Administration is fast tracking renewable projects on federal and military lands and providing loans for advanced biofuels development, while simultaneously slow-walking  oil and gas development on federal lands in its increasingly misnamed “all of the above” energy policy. Currently, the federal government leases less than 2.2 percent of federal offshore areas and less than 6 percent of federal onshore lands for oil and natural gas production. Last fiscal year, production of oil on federal lands fell by 11 percent led by a decline in offshore oil production of 17 percent. And, the Administration has drastically cut back on the federal lands available for oil shale development, as we point out here. To provide the future energy needs of this country we need to develop all of our energy resources. But, our current leadership is promoting energy sources that are more expensive than the traditional sources, neither heeding the current status of the U.S. economy and the difficult financial times Americans are facing, nor assessing what the impacts of more expensive energy sources will mean for our national security or our economic competitiveness.



[i] U.S. Department of Agriculture, USDA Guarantees Loan to Support Development of Nevada Advanced Biofuels Facility Capable of Creating Energy from Solid Waste, August 6, 2012, http://www.usda.gov/wps/portal/usda/usdahome?contentid=2012/08/0263.xml

[ii] Politico Pro, Administration moving on 7 energy projects, August 7, 2012, https://www.politicopro.com/story/energy/?id=13277

[iii] Bloomberg Business Week, Wind-Energy Developers Get Access to U.S. Land Used by Pentagon, August 6, 2012, http://www.businessweek.com/news/2012-08-06/wind-energy-developers-get-access-to-u-dot-s-dot-land-used-by-pentagon

[iv] Politico Pro, DOI, DoD to reopen 16M acres for renewable development, August 6, 2012, https://www.politicopro.com/story/energy/?id=13258

[v] The Hill, Defense Dept, Interior seek to speed up renewables on military lands, August, 6, 2012, http://thehill.com/blogs/e2-wire/e2-wire/242373-defense-dept-interior-seek-to-speed-renewables-on-military-lands


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